Business Franchise Australia


A Realistic Approach is the Best Way to Avoid Disputes

When you are considering buying into a franchise operation and embarking on a new path in life, it’s obviously a very exciting time and you could be forgiven for assuming that everything is going to be hunky dory.

You may have visions of a permanently harmonious relationship with your franchisor and all of your future customers, but of course, life’s not like that.

Disputes are very common between franchisors and franchisees and of  course, any customer-facing business is going  to have its fair share of angry moments. How you respond to disputes will make all of the difference as far as your relationship with the franchisor is concerned but having realistic expectations is half the battle.

In my experience as a mediator between franchisors and franchisees, the most common cause of disputes, especially early on in the relationship, is ultimately a lack of realistic expectations. It is normal to have expectations and intentions regardless of the type of relationship it is, be it a business, a romance or within the work place. We all have expectations built into our psyche from an early age whether from our family environment and upbringing, our worldview or things we have experienced. Unfortunately, sometimes those expectations and intentions may not be healthy, and we find ourselves disappointed time and again because they are not met. This is why it’s important that you embark on your new venture with a healthy dose of realism, an open mind, the correct approach and the tools to manage disputes which are inevitable in most franchise operations, especially in the early stages.

What are healthy expectations to have when you buy into a franchise?

Honesty, trust, mutual respect, pro-active approach to conflict and equality are healthy expectations for any relationship, especially a new business venture in which you and the franchisor have to work together towards common goals.

What are unhealthy expectations?

  • Expecting the undivided attention of the franchisor in getting your business up and running.
  • Expecting the franchisor to always know what you are thinking, what help and advice you might require.
  • Expecting that there won’t be any disputes or even tense times in the relationship between you and the franchisor.
  • Expecting that the franchise is definitely going to be successful because others have been.
  • Expecting that when it comes to disputes with customers, the franchisor will always be on your side (as opposed to protecting the brand).

These are just some examples of unhealthy expectations. Expectations  turn  sour  when they come loaded with judgement – should, shouldn’t, right, wrong, good and bad. They are assumptions about how reality “should be”.

One of the greatest relationship destroyers is that of unrealistic expectations. Expecting something out of the venture that the other is either ignorant of, unwilling to provide, or simply unable to provide, can be emotionally damaging for both parties involved and unhealthy for business.

Having realistic expectations in our business relationships involves accepting that no one is perfect, accepting ourselves and others for who they are and that sometimes the best laid plans don’t work out.

How can we have healthy expectations around a new franchise operation? – It starts with changing your perspective and knowing exactly what it is that you want out of the deal from a business, lifestyle and financial perspective.

What are the real costs

This way, you can share these with the franchisor right in the beginning of the relationship so that there are no surprises or unhappiness later on. Speak candidly with the franchisor about your expectations so that you get equally candid responses in return.

It also helps to formalise these expectations by writing them down so that you remember what you set out to achieve in the first place.

When setting realistic expectations about your franchise, take the view and experience of the franchisor into account. Your expectations may not be realistic and require adjustment. Be willing to compromise and be flexible in finalising your expectations. Remember, you are going in blind whilst others can speak from experience.

Once you have established realistic expectations in order to help avoid disputes, start adjusting your expectations with regards to how disputes are likely to be handled between you and the franchisor and between you and your clients. If you accept that disputes are inevitable and have a plan to manage them, disputes won’t keep you up at night.

If you are the kind of person that does not like confrontation, then you should give serious consideration to the kind of franchise operation you buy into. Most businesses that are customer-facing, for example retail operations, can expect some form of customer dispute on an almost daily basis. It’s just the nature of the beast. Ask the franchisor what it’s like working in the business on a daily basis and cross-reference this  with what other franchise owners tell you. If that particular industry is prone to disputes, of any magnitude, find out how these are typically resolved.

If you prefer avoiding conflict at all costs but you are desperate to establish a franchise in an industry prone to disputes, then perhaps all  you need to do is adjust your way of thinking. Conflict is often viewed negatively, and the majority of people would choose to avoid it rather than face it head on, even though most realise it is a strategy that doesn’t work. Although conflict resolution can often be an uncomfortable process it is a driving force for change and if handled competently can create a positive outcome in relationships, whether it is with a customer or the franchisor. We must embrace being comfortable with the uncomfortable to do so.

Most often, the main reason people avoid conflict is fear. By definition conflict is about opposition, incompatibility and struggle. None of that sounds positive. Conflict creates a stressful environment that causes the responses of freeze, fight and flight naturally in us. We freeze to go undetected, fight to kill, respond with fright to intensify awareness, and take flight to live another day. Most responses in these categories lead to destructive interactions. Your past experiences with conflict are likely the most painful moments of your life and can naturally impact on your current dispute. Conflict is often destructive, other times disruptive.

Projects at work get delayed when disputes exist. A group momentarily stops enjoying a party when friends fight. A family shuts each other out for the remainder of the night after a disagreement over dinner. It is uncomfortable for everyone.

Conflict and disputes are a natural part of  any industry and likewise, any franchise operation. Many franchisees walk away from the master franchise because of unrealistic expectations and this is not ideal for either party. Get your head around what you’re getting into and accept that disputes are all part of life.

Alison Shaw is a former lawyer and CEO of national mediation firm SHAW Dispute Resolution Australia. SHAW Mediation offers voluntary mediation opportunities to everyone for all types of disputes anywhere, anytime for fixed scaled fees. Alison and her national team of mediators are all nationally accredited and have a legal background.